Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated August 3, 2026. Quick answer: your four options are the ordinary ones — leave it, roll it to a new plan, roll it to an IRA, or cash out — and unlike the 457(b), a 403(b) has no penalty exemption to protect. The two things worth checking before you move it are the rule of 55 and any annuity surrender terms.
The rule-of-55 check, first
If you separated in or after the year you turned 55, distributions from that employer’s plan escape the 10% tax. Roll the money to an IRA and that protection is gone — it does not travel. So if you might need this money before 59½, leaving it in the plan can be worth more than any improvement in the investment menu.
The annuity check, second
403(b) balances are frequently held in annuity contracts, which can carry surrender charges on exit and their own timing rules. That is a contract term, separate from the tax rules and separate from the plan document. Ask for the surrender schedule in writing before initiating a transfer, and compare the charge against what you expect to save.
The rest of the comparison
- Leave it — simplest, preserves rule-of-55 access, keeps you in the plan’s menu and costs.
- New employer’s plan — consolidation without moving to an IRA; whether the rule-of-55 status carries is a question for the receiving plan.
- IRA — widest investment choice, ends rule-of-55 access.
- Cash out — ordinary income plus, usually, the 10% tax; also triggers mandatory withholding on the eligible rollover distribution.
Holding both accounts means the order you decide in matters.
If you also hold a 457(b), decide the two together and in the right order: the 457(b) is the one with the feature worth protecting — its four options.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. The matching service is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here. You stay on this page.
What happens when you press the button
It requests contact details and phone verification by text. Nothing loads and nothing reaches Kapitalwise until you press the button. Submitting the form does not guarantee an adviser or a match.
Penalty and limit statements on this page are read from the Internal Revenue Code itself (26 U.S.C. 72, 402, 414, 457 and 4974) and from IRS Notice 2025-67 for the 2026 figures. General information, not tax advice; your plan document can be more restrictive than the Code, and it governs what your plan actually allows.